Women and family programing paid off, but radio revenues down
Announcing his company’s first quarter results Tuesday, Corus Entertainment president and CEO John Cassaday called 2014 a “pivotal year” for the company following its acquisition of the remaining 50% stake in Teletoon and the French-language specialty services Séries+ and Historia.
The Toronto-based media company, which counts specialty and pay TV services and radio stations among its assets, reported first quarter income of $150.9 million for the three months ended Nov. 30, including a one-time non-cash gain of $127.9 million reflecting the impact of a fair value estimate of its 50% stake in Teletoon.
The company reported consolidated revenues of $226 million for the three months ended Nov. 30, an 8% increase from $209 million in the year-earlier period.
During a conference call with analysts, Cassaday said that “solid” advertising growth in both its women and family portfolio – led by the specialty services W Network and YTV – and subscriber gains for its new specialty service ABC Spark were offset by softness in its radio and children’s service businesses, as well as what he called “tough” year-over-year comparables in its Nelvana production business.
Cassaday said the company is poised for revenue growth in fiscal 2014 following the CRTC’s recent approval of its remaining 50% interest in Teletoon and the French-language specialty services Séries+ and Historia. The acquisition formally closed on Jan. 1.
Revenues for the company’s television division increased to $177.9 million from $157.6 million in the corresponding year-earlier period.
Revenues for the company’s specialty services were up 35%, which Cassaday attributed to solid growth on the W Network, the Oprah Winfrey Network (OWN) and ABC Spark.
He told analysts that W Network’s decision to air back-to-back movies each night during the holiday period helped it become the number one specialty service among women 25-54 throughout the month of December. YTV’s focus on holiday favourites also helped the service rate first among kids 2-11 and 6-11 and women 18-49, he said.
Cassaday said the company expects to see solid second quarter advertising growth in its TV division, driven by new accounts and business in new categories. ABC Spark’s schedule of returning hits – including Baby Daddy, Twisted and The Fosters –has made the channel popular with the millennial audience, he added.
Cassaday said the company expected to see an upswing in advertising in the second quarter, with YTV relying on its top-rated live-action series Sam & Cat and “tent-pole” series such as SpongeBob SquarePants.
Radio revenues declined 8% to $48 million from $52.3 million, with Cassaday noting that ad softness in several markets including Toronto – coupled with what he characterized as “ratings issues” – adversely impacted revenue growth. The company’s Calgary cluster saw growth resulting from strong ratings, he noted.
The company said that ad spending increased in categories including credit cards and government advertising, with Cassaday noting that it has adopted an “aggressive” local sales strategy designed to offset the decline in national advertising revenue. He said that these changes are expected to drive revenue growth in the latter part of fiscal 2014.
Cassaday said the company also expects to expand its radio offering in the Ottawa market, pending CRTC approval of its application to purchase the FM stations CKQB The Bear and CJOT Boom 99.7 from Bell Media. “It will enable us to bring the full strength of our radio experience to this key large market,” he said.